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South Korean Arcades Exploit Gambling Law Loopholes

23 December 2005

SOUTH KOREA – As reported by the JoongAng Daily: "According to the Ministry of Culture and Tourism, 13,000 adult arcades, betting rooms equipped with simulated horse racing games or slot machines and offering modest payouts for modest bets, are now in operation nationwide. That is an increase of 50 percent from 2002. Gamblers are supposedly allowed to bet limited amounts of real money on the horse races shown on 200-inch display screens, or pull the handles on slot machines in the hope of winning gift certificates.

"An analysis by the JoongAng Ilbo of data from 2002 to 2005 provided by Roh Woong-rae, a representative of the governing Uri party, showed that there is an average of 159 arcades per district in Seoul, up 70 percent from 2002. Gangdong-gu with 386 arcades ranked as the No. 1 gambling area of the city, followed by Seocho (347) and Sungdong (295). In those districts, the number of arcades exceeds the number of pharmacies or laundries.

"According to a government analysis, the operators of adult arcades make profits estimated at 1.2 trillion won ($1.17 billion) annually, which means 33 billion won is being lost by gamblers to such arcades each day.

"Experts say that changes to the law covering singing, video and gaming rooms approved in 2001, which permitted the opening of adult arcades by simply registering them at a district office, is the reason for the large growth in the number of these gambling facilities. Although the Culture Ministry announced last December that arcade users could not spend more than 90,000 won per hour on one game machine, and that gift certificate prizes won could be no larger than 20,000 won each, a significant number of arcades have illegally reprogrammed machines to raise the amount that can be spent per hour and offer prizes worth several millions of won each…"

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